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Can F5 Networks (FFIV) Keep the Momentum Going in 2017?
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F5 Networks Inc. (FFIV - Free Report) is one of the technology companies that have demonstrated remarkable share price performance last year. The company has generated high returns for investors in 2016, and has the potential to exceed expectations in the days ahead.
Last year, the stock surged roughly 49.3% and outperformed the Zacks categorized Internet Software industry, which witnessed a decline of 6.7%.
What’s Driving the Stock?
F5 Networks is a leading provider of integrated Internet traffic and content management solutions designed to improve the availability and performance of mission-critical Internet-based servers and applications. Better execution and focus on enterprise and service providers have placed F5 Networks well in the application delivery controller market.
The company is on a growth trajectory, gathering momentum from its positive earnings surprise history and strong fundamentals.
It has posted a positive earnings surprise in three out of the last four quarters, with an average positive surprise of 3.37%.
Last quarter, the company reported splendid results. Its top and bottom line not only came ahead of the respective Zacks Consensus Estimate but also marked solid year-over-year improvement. Furthermore, buoyed by better-than-expected results, the company provided an encouraging guidance for the first quarter of fiscal 2017.
Notably, F5 Networks’ “Good, Better, Best” (GBB) pricing strategies and higher competencies of BIG-IQ platform helped to streamline its product portfolio and drive year-over-year revenue growth. Revenue growth seems to be steady and was positively impacted by strength across all its business segments and higher software revenues.
We believe that the company’s product refreshes will boost revenues, going forward. Moreover, these initiatives are expected to expand the company’s total addressable market and result in client wins.
Given its Zacks Rank #2 (Buy) and VGM Style Score of “B”, we believe that the stock still has much upside potential. Moreover, the company currently trades at a forward P/E ratio of 22.2x, which is much lower than the Zacks categorized Internet Software industry average of 240.8x. This also validates our confidence in the stock.
The Zacks Consensus Estimate for Upland Software has moved upward in the last 60 days. Moreover, the stock has a long-term expected EPS growth rate of 22.5%, higher than the industry average of 21.5%.
NIC has a VGM Style Score of “B” and has witnessed upward estimate revision for 2017 over the last 7 days.
The Zacks Consensus Estimate for NICE has also moved up in the last 60 days.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
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Can F5 Networks (FFIV) Keep the Momentum Going in 2017?
F5 Networks Inc. (FFIV - Free Report) is one of the technology companies that have demonstrated remarkable share price performance last year. The company has generated high returns for investors in 2016, and has the potential to exceed expectations in the days ahead.
Last year, the stock surged roughly 49.3% and outperformed the Zacks categorized Internet Software industry, which witnessed a decline of 6.7%.
What’s Driving the Stock?
F5 Networks is a leading provider of integrated Internet traffic and content management solutions designed to improve the availability and performance of mission-critical Internet-based servers and applications. Better execution and focus on enterprise and service providers have placed F5 Networks well in the application delivery controller market.
The company is on a growth trajectory, gathering momentum from its positive earnings surprise history and strong fundamentals.
It has posted a positive earnings surprise in three out of the last four quarters, with an average positive surprise of 3.37%.
Last quarter, the company reported splendid results. Its top and bottom line not only came ahead of the respective Zacks Consensus Estimate but also marked solid year-over-year improvement. Furthermore, buoyed by better-than-expected results, the company provided an encouraging guidance for the first quarter of fiscal 2017.
Notably, F5 Networks’ “Good, Better, Best” (GBB) pricing strategies and higher competencies of BIG-IQ platform helped to streamline its product portfolio and drive year-over-year revenue growth. Revenue growth seems to be steady and was positively impacted by strength across all its business segments and higher software revenues.
We believe that the company’s product refreshes will boost revenues, going forward. Moreover, these initiatives are expected to expand the company’s total addressable market and result in client wins.
Given its Zacks Rank #2 (Buy) and VGM Style Score of “B”, we believe that the stock still has much upside potential. Moreover, the company currently trades at a forward P/E ratio of 22.2x, which is much lower than the Zacks categorized Internet Software industry average of 240.8x. This also validates our confidence in the stock.
Other Stocks to Consider
Some other stocks worth considering in the Internet Software industry are Upland Software Inc. (UPLD - Free Report) , NIC Inc. and NICE Ltd. (NICE - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Upland Software has moved upward in the last 60 days. Moreover, the stock has a long-term expected EPS growth rate of 22.5%, higher than the industry average of 21.5%.
NIC has a VGM Style Score of “B” and has witnessed upward estimate revision for 2017 over the last 7 days.
The Zacks Consensus Estimate for NICE has also moved up in the last 60 days.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>